In its monthly confidence index, the Equipment Leasing and Finance Foundation found that confidence in the equipment finance industry rose to 67.4 in August, marking a steep increase from the July index of 62.6.

“Demand has stayed strong through the summer. The threat of potentially increasing interest rates and projects that have been delayed for too long have been principal motivators for our customers,” said Valerie Hayes Jester, president of Brandywine Capital. “I feel optimism is fueled by economic conditions improving and by consumer sentiment that seems to echo that positive attitude.”
  
When asked to assess their business conditions over the next four months, 36.4% of executives responding said they believe business conditions will improve over the next four months, an increase from 17.2% in July. Additionally, 63.6% of respondents believe business conditions will remain the same over the next four months, a decrease from 75.9% in July.  None believe business conditions will worsen, a decrease from 6.9% who believed so the previous month.

Expectations took a sharp turn upward in terms of the demand for leases and loans to fund capital expenditures, with 40.9% anticipating an increase over the next four months, up from 20.7% in July. Meanwhile, 59.1% believe demand will “remain the same” during the same four-month time period, down from 72.4% the previous month.  None believe demand will decline, a decrease from 6.9% who believed so in July. 

In addition, 31.8% of executives surveyed believe they will have more access to capital to fund equipment acquisitions in the next four months, up for 20.7% in July.

However, the index also showed a decrease in plans for expanding workforces and in confidence in the U.S. economy. Of those surveyed, only 36.4% expect to hire more employees in the next four months, a downturn from the 51.7% recorded in July. There was also a nearly 10% drop in confidence in the U.S. economy, with 4.5% of respondents evaluating the current economic environment as “excellent” following a 13.8% mark in July.

“I have concerns about the impact on people’s confidence from China’s devaluation of its currency and the decreasing price of oil—both deflationary—and the overhang of the Fed possibly raising interest rates in the near term,” said William H. Besgen, president and COO of Hitachi Capital.